Going from 'permanent' job to 'Freelance'

WHIP IT!

What are the main differences, the 'Dos and Don'ts' and what needs to be put in place, tax wise etc, for someone who is doing the above?

thanks in advance

allibastor

WHIP IT! wrote: »

What are the main differences, the 'Dos and Don'ts' and what needs to be put in place, tax wise etc, for someone who is doing the above?

thanks in advance

why in gods name would you do this. freelance means they can let you go when they want at the drop of a hat.

WHIP IT!

allibastor wrote: »

why in gods name would you do this. freelance means they can let you go when they want at the drop of a hat.

Yes, I'm aware of that but, humour me if you don't mind

Also, just to clarify, I would be movng jobs - not just makign a current permanent position freelance.

Nody

Well to make it easy you can use a umbrella company to do your taxes etc. but as a general rule of thumb you'd be looking at 2x salary to get out the same net due to paying all the additional taxes yourself; no paid holidays (you don't work you don't get paid) that you need to save for. Same is true if you get sick (no one to pay you sick leave) and it tends to mess up your ability to claim dole etc. down the line.

allibastor

WHIP IT! wrote: »

Yes, I'm aware of that but, humour me if you don't mind

Also, just to clarify, I would be movng jobs - not just makign a current permanent position freelance.

Not 2x anyway that bollockS, but you do need to take pension etc into account. Make sure if going the umbrella route you get put down as both employer and employee to ensure your dole. Other than that make sure you save around 150 a week for un seeables, etc

WHIP IT!

allibastor wrote: »

Not 2x anyway that bollockS, but you do need to take pension etc into account. Make sure if going the umbrella route you get put down as both employer and employee to ensure your dole. Other than that make sure you save around 150 a week for un seeables, etc

Thanks alot... could you explain more about the Umbrella Company? If it's important with future regard to the dole, I presume the same can be said if I wanted to, say, apply for a mortgage in the future?

How do I sort out my taxes etc?

Mrs OBumble

allibastor wrote: »

Not 2x anyway that bollockS,

Once you figure in all the previously mentioned stuff and then four weeks per year annual leave, some sick leave, some training, and covering some down-time when they just don't have work for you, then 2x doesn't sound so wrong after all.

allibastor

WHIP IT! wrote: »

Thanks alot... could you explain more about the Umbrella Company? If it's important with future regard to the dole, I presume the same can be said if I wanted to, say, apply for a mortgage in the future?

How do I sort out my taxes etc?

You won't get on well with a mortgage unless you have a very good savings record and a very long service contract.
As the previous poster said make sure your job is covered in training needs etc and you not on too much down time etc.

On the umbrella side, your tax will be lower if you can put in some mileage expenses and some other business expenses your tax take should be less, you can also claim things like a home office expense such as a percentage of your gas, electric , Internet etc.

From my experience if your in a job which has a very good record of keeping you employed the freelance is grand, but any uncertainty is not worth leaving a full time.
A good umbrella company is cxc, I have used then many times and found them excellent

chris85

I think if you are considering a mortgage you should forget about freelancing. No bank will go near a worker who doesnt have a guaranteed income who can have no work at times and possibly not even be able to get state benefits if the freelancing dries up completely and left without a job.

you have to sort your own taxes, pension, PRSI, expenses, billing the client (and waiting to get paid), holidays. You are a self employed person and get the usual things that go with it. Mainly uncertainty .

looksee

If you work from home you could find issues with your house insurance and car insurance if you are using it to visit clients.

You can't have it both ways - if you claim for allowances you have to be on the record as working at home.

You may need to register for VAT. Either way can create another layer of issues for clients.

You need to allow up to one day a week for sending out invoices and doorstepping to get paid, working out quotes, negotiating, looking for work, maintaining a website or advertising, chasing up suppliers/ creating presentation stuff/ getting stuff printed (depending on your area of expertise). If something goes wrong with a job the entire fallout and cost is on your head. Do you ever need backup or expertise from someone else at work - you will not have that on your own.

StillWaters

The simplest way to do it is to register with revenue as self employed, make a tax return every year (September). Keep reciepts for everything, read up about what is allowable as an expense (head over to the entrepreneur forum). Put at least 25% away to cover your tax bill.

I don't think there is any way around paying class S stamps so you won't be eligible for job seekers benefit, but your stamps do count towards State Pension. I think banks look for 3 years accounts for self employed mortgage applicants.

Mrs OBumble

StillWaters wrote: »

I don't think there is any way around paying class S stamps so you won't be eligible for job seekers benefit, but your stamps do count towards State Pension.

There is a way - it's one of the options that umbrella companies offer.

I believe there's another way, too, that you can voluntarily pay Class A stamps, but have never found details of how exactly to do it.



OP, it occurred to me last night: you also need professional indemnity insurance (in case someone sues you for being incompetent) and possibly public liability insurance (if there's a chance of someone getting injured etc from your work).

Someone I used to work with believed that "you only need indemnity insurance if you're incompetent" - the fact that she was stupid enough to not see the flaw in this didn't reflect on her work at all